Vicwest Inc. Reports Strong 2012 Operating Profit

OAKVILLE, ON, March 6, 2013 /CNW/ - Vicwest Inc. (the "Company") (TSX: VIC, VIC.DB) today reported strong operating performance gains for the three and 12 months ended December 31, 2012 as well as record annual agricultural product sales.

Consolidated Performance Highlights

($ millions except per share)	Three months ended December 31, 2012		Three months ended December 31, 2011		12 months ended December 31, 2012		12 months ended December 31, 2011
Revenue	$	103.1	$	108.8	$	411.8	$	417.3
Gross profit		19.1		17.0		76.1		67.7
EBITDA^1		8.7		6.2		34.3		24.7
EBITDA margin^1		8.4%		5.7%		8.3%		5.9%
Net income		2.8		1.8		11.6		12.5
Net income per share (basic)		0.15		0.09		0.62		0.67
Net income excluding change in fair value of embedded derivative^2		3.3		1.8		12.8		8.7
Net income per share (basic, excluding change in fair value of embedded derivative^2)		0.18		0.09		0.68		0.45
^1EBITDA is calculated as earnings before finance expense, income taxes, depreciation, amortization and change in fair value of embedded derivative.  EBITDA and EBITDA margin are non-IFRS measures.
^2 Net income excluding change in fair value of the embedded derivative is a non-IFRS measure.

"We ended 2012 with another strong quarter of earnings performance and the successful completion of our largest-ever organic growth investments," said Colin Osborne, President and CEO. "Higher earnings reflect growth in value-added product sales at Westeel, All Weather and in Vicwest Building Products western Canadian regions, lower procurement costs and improving business efficiencies. Our newly opened insulated metal panel ("IMP") plant in Little Rock, Arkansas, and our new automated roofline at Westeel Winnipeg prepare us well for the next stage of growth."

"Continued cash flow and earnings growth throughout the final half of 2012, along with strong working capital management, allowed us to dramatically reduce year end leverage even while investing in these important capital projects," said Kent Harris, Chief Financial Officer. "Our financial position is the strongest it's been in years and gives us the foundation to support our organic and acquisition growth plans to achieve broader market leadership."

Divisional Results

($ millions)	Three months ended December 31, 2012		Three months ended December 31, 2011		12 months ended December 31, 2012		12 months ended December 31, 2011
Revenue
Vicwest Building Products	$	66.7	$	75.1	$	256.3	$	274.6
Westeel		36.5		33.7		155.5		142.7
Net Income^3
Vicwest Building Products	$	2.4	$	0.6	$	5.4	$	2.2
Westeel		3.6		3.7		19.1		14.8
^3 Net income before finance expense, income taxes and change in fair value of embedded derivative.

Divisional Highlights

• Vicwest Building Products ("Vicwest BP") opened its new 100,000 square foot IMP manufacturing plant in Little Rock, Arkansas in November 2012, a strategic move that increases IMP capacity by more than 50% and creates a more effective network to serve the growing North American IMP market;
• Subsequent to quarter end, on January 22, 2013, the Company executed its rights under a convertible debenture and acquired 56% of the common shares of All Weather. The purchase of the majority position supports the Company's overall growth strategy, provides greater opportunities for IMP market expansion across North America and capitalizes on recent business advancements between the two companies;
• Westeel automated the production of its innovative roof system products in the fourth quarter, a move that enhances throughput and flexibility for its Winnipeg plant in serving both on-farm and commercial agriculture applications;
• Westeel opened a new U.S. warehouse in the fourth quarter and early in 2013 announced the opening of a new sales and engineering branch in Mumbai, India to serve one of the world's largest grain and oilseed-producing countries.  This branch will be operational in the second quarter of this year.

Financial Position
At December 31, 2012, senior net debt to EBITDA¹ improved to 0.3 to 1 from 1.4 to 1 at year-end 2011. At period end, the Company had net debt of $61.4 down from $73.6 million at September 30, 2012 and $85.4 million at December 31, 2011, on improved working capital management. At year end 2012, the Company had $79.6 million in unused availability under its $100 million credit facility secured February 27, 2012.

Dividend
The Board of Directors has declared a first quarter dividend of $0.15 per share, payable on April 15, 2013 for shareholders of record on March 29, 2013. This is consistent with the quarterly dividends declared and paid in 2012.

Outlook
Management believes that the trends driving long term demand for the Company's products are positive and that the business will benefit from these trends because of its competitive advantages including strong customer relationships, extensive distribution networks, well recognized brands, and efficient operations.  These trends include i) the growing global need for grain storage and management systems to increase crop yields in support of population growth, ii) improving construction markets in North America and iii) increasing demand for energy efficient buildings.  The combination of our inherent Company strengths and exposure to these markets provide good fundamentals to support long-term growth.

In the short run, the Company's early results in 2013 will not be indicative of performance for the year due primarily to a temporary but significant shift in customer buying patterns at Westeel. This change will substantially reduce the normal run up in sales and profitability that occurs early in the year, however we expect this to lead to more even order flow as the year progresses.  Westeel's outlook beyond the opening months of 2013 is positive based on expectations of year over year domestic and international agricultural product sales growth. Westeel is positioned to serve European, Middle Eastern and African ("EMEA") markets through its office in Madrid, Spain, and to broaden its opportunity in the Far East with its soon to be opened office in Mumbai, India.  Westeel continues to focus on catalogue expansion within the grain market and growth opportunities in liquid storage, including opportunities made available by the 2012 introduction of portable, reusable above-ground water storage systems for condensate and rainwater harvesting, irrigation and hydro fracking.

In 2013, Vicwest BP is projected to generate growing revenues due to contributions made by All Weather and the recent opening of the division's third insulated metal panel manufacturing facility.  Adding this new facility to its North American IMP network provides Vicwest BP with a stronger platform to attract new customers and better serve existing customers throughout all major segments of the construction industry; from commercial and industrial to cold storage.  Vicwest BP continues to focus on new product development and margin expansion within its traditional product offerings and expects to capitalize on these initiatives in 2013.  While Vicwest BP expects ongoing improvement in U.S. non-residential construction activity to support its overall growth prospects in 2013, it expects challenging market conditions to continue in the Canadian building products market.

Fourth Quarter Conference Call and Webcast
Vicwest Inc. will host its fourth quarter 2012 conference call and webcast on webcast on March 7, 2013 at 11:00 a.m. (ET). To participate in the teleconference, the numbers are 416-644-3414 or 1-800-814-4859. Callers are advised to call in 10 minutes in advance. To participate in the webcast, please visit www.vicwestinc.com.

About Vicwest Inc.
Vicwest Inc. is a leading North American manufacturer and distributor of engineered storage and handling systems for grain, fertilizer and liquid storage as well as building construction products for agricultural, institutional, commercial, industrial and residential markets.  We operate through two strategically aligned divisions: Vicwest Building Products and Westeel.  With approximately 7,000 customers, 1,200 dedicated employees and 34 business partners, the Company is positioned for growth in domestic and international markets.  Vicwest Inc. is a member of the S&P/TSX SmallCap Index. For more information, visit www.vicwestinc.com.

Forward-Looking Statements
Certain statements in this news release constitute forward-looking statements within the meaning of applicable securities laws.  Forward-looking statements include, but are not limited to, management's beliefs, plans, estimates, and intentions, and similar statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts.  Forward-looking statements generally can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will", "expect", "intend", "estimate", "anticipate", "believe", "should", "plans" or "continue", or similar expressions suggesting future outcomes or events.  Such forward-looking statements reflect management's current beliefs and are based on information currently available to management. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those contemplated by such statements.  Readers are encouraged to review the most recently filed Management's Discussion and Analysis and other disclosure documents filed by the Company with Canadian securities regulatory agencies and commissions. Readers are cautioned not to place undue reliance on the Company's forward-looking statements.  The forward-looking statements contained herein are made as of the date of this press release and except as required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

 

SOURCE: Vicwest Inc.

Colin Osborne
President & Chief Executive Officer
Vicwest Inc.
Tel:  [phone]
[email protected]

Kent Harris
Chief Financial Officer
Vicwest Inc.
Tel: [phone]
[email protected]